NASDAQ Error Accidentally Cancels WhiteHorse IPO

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NASDAQ, in a potentially expensive mistake, accidentally cancelled the initial public offering (IPO) of WhiteHorse Finance; which was meant to go live today.

NASDAQ Error Accidentally Cancels WhiteHorse IPO

The NASDAQ exchange had earlier agreed with WhiteHorse and its underwriter to push the IPO out later in the day. But instead of extending the IPO, it was accidentally cancelled by a person on the company’s MarketWatch arm, which is in charge of managing IPO launches. The person accidentally cancelled the IPO rather than pushing back the timing, said a Reuters’ source close to the situation, but who could not be identified.

Reuters’ source said: “This was a human error; this wasn’t a trading system or a computerized glitch.”

Joe Christinat, spokesman for NASDAQ, said that the company had no comment to make on the IPO beyond the emails already sent out, one of which said: “All open and pending orders will be cancelled back to customers.”

NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) is expected to later advise traders on when the listing will take place, which may be as soon as this afternoon, according to Alastair Merrick, an official with H.I.G. Capital. WhiteHorse listed H.I.G. as an investment advisor on the deal.

WhiteHorse Finance is a business development company that originates and invests in loans and privately held small-capitalisation businesses. The company’s IPO consisted of 6.67 million shares priced at $15 per share, WhiteHorse said earlier. Trading was expected to begin at about 11 a.m. EST, according to a notice sent to traders at 8.15 a.m. An advisory notice was released later, stating that trading was delayed by five minutes. A further notice at 11.27 a.m. revealed the offering was postponed and that all open pending orders would be cancelled.

The mistake today likely bought back bad memories for traders of the botched Facebook IPO earlier in the year, in May. Massive demand caused the social networking giant’s public offering to suffer a 45-minute delay in the start of stock trading. Market makers claimed that the mistake that day cost hundreds of millions of dollars due to the problems with the website’s IPO.

Following today’s news, NASDAQ OMX shares were down 1.2 percent today, at $23.87, and underperforming a 0.4 percent decline on the NASDAQ Composite.

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